Court Refuses To Certify Class of Unpaid Student Interns

by BakerHostetler
Contact

Student internships can provide worthwhile benefits to the students involved, who gain experience, contacts, and accomplishments to place on their resumes. Employers, too, can benefit from the work and insight of the intern, but may also want to take advantage of the benefits of free intern time. Recognizing the benefit to the interns, the Department of Labor permits an intern’s time to be unpaid if, in general terms, the parties understand that it is unpaid and the arrangement is primarily for the student’s educational benefit

In the wake of the recent recession, there has been a spate of lawsuits challenging whether various unpaid internships should be compensable because, it is generally argued, they are primarily for the benefit of the employer. A recent case from the Southern District of New York, while suggesting that such claims might be viable, also exposes the problem for the plaintiffs that they are probably not suitable for class action treatment.

In Wang v. The Hearst Corporation, Case No. 12 CV 793 (HB) (S.D.N.Y. May 8, 2013), the plaintiff brought a putative class and collective action arguing that the employer, a magazine publisher, improperly refused to pay its interns because, she argued, the internships were primarily for its own benefit. Several other interns opted into the litigation. The plaintiff claimed that the class had 3,000 potential members. The defendant moved for summary judgment and the plaintiffs moved for class certification.

The court first addressed, in a straightforward fashion, the allegations of the plaintiffs and opt-ins and whether the employer was entitled to summary judgment. The court looked to the Department of Labor’s Fact Sheet No. 71 at least for a framework to review the employer’s actions. Incidentally, as noted by the court, there is a substantial split of authority as to whether the fact sheet is binding, whether it is simply a guide, and the extent to which all six factors must be satisfied. The factors set forth in that fact sheet are:

(1) The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

(2) The internship experience is for the benefit of the intern;

(3) The intern does not displace regular employees, but works under close supervision of existing staff;

(4) The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

(5) The intern is not necessarily entitled to a job at the conclusion of the internship; and

(6) The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The court found that while the defendant had clearly established some of the elements necessary for an unpaid internship, other elements differed by degree, such as the amount of training, the level of supervision, and the benefit to the employer. It thus denied summary judgment.

But for the same reasons, the court also denied the plaintiffs’ motion for class certification. Although the employer had a uniform policy of not paying interns, it found that the fact that such an analysis was required and the variations among different departments meant that Rule 23(a) commonality did not exist. Further, it found no superiority or predominance under Rule 23(b)(3) due to the need for individualized proof. Thus, the court found no basis to certify the proposed class.

The Wang case is significant for at least two reasons. First, it is one of the first cases in what could have been a wave of litigation involving unpaid internships generally. While employers should obviously not take advantage of student interns, a contrary holding would have discouraged employers from having such programs and had a negative effect on hands-on educational opportunities for students.

Second, the Wang case reveals one of the fundamental issues in these types of actions. Plaintiffs will often seek certification based on uniform policies, but then argue inconsistently that individual differences or issues create fact issues when the employer moves for summary judgment. The Wang court, by ruling on both motions at the same time, shows that these cases are best handled on an individual basis.

The bottom line: Cases challenging unpaid internships are generally not suitable for class action treatment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!